Murdoch Must Sell His TV Stations or Newspapers in N.Y. and Boston

WASHINGTON — The spending bill signed into law last week by President Reagan will force publisher Rupert Murdoch to divest himself either of his New York and Boston newspapers or his TV stations in those cities next year, government officials said Wednesday.

The full text of the massive 1988 spending measure, released this week, shows that Congress, in a last-minute change to the section appropriating money for the Federal Communications Commission, forbade the agency to alter a 1975 rule blocking any single entity from owning both a TV station and newspaper in the same major city.

Congress also said the FCC may not extend any temporary waivers to the "cross-ownership" rule, which the agency had been preparing to reconsider.

Murdoch's News America Corp. holds the only two such waivers.

The FCC said that on March 6, 1988, the Australian-born publisher's two-year waiver to operate the New York Post and New York's WNEW runs out.

An 18-month waiver to operate the Boston Herald and WFXT, which is licensed to a Murdoch subsidiary, ends June 30.

"All he has to do is take care of the problem" by the deadline, said Steve Sewell, deputy director of the FCC's video services branch. "Obviously, you can take care of the problem by selling the newspaper or the TV station or both."

Sewell said Murdoch has not indicated to the commission how he would resolve the situation. But, "You could guess, since he's trying to start a TV network, it's more likely he would divest himself of the newspapers."

Other FCC officials said they were shocked by the congressional action. Capitol Hill sources said the clause was inserted at the last minute by senators on the conference committee that worked out the legislation, led by Sen. Edward M. Kennedy (D-Mass.).

Attempts to reach Kennedy for comment were unsuccessful.

A spokeswoman for News America Corp. in New York said the company had no immediate comment.

Sources close to Murdoch, however, said the publisher has been trying to sell the money-losing Post for months and may close the newspaper and sell the real estate if no buyer is found.

Murdoch acquired WNEW from Metromedia as part of a multistation, $1.4-billion deal aimed at building his Fox Network.

For more than a year, Murdoch has been waging a campaign to remove the legal barriers that prevent him from holding the stations and the newspapers. He wanted the rules lifted or the waiver made permanent.

Recently, his chances seemed to be improving, as the National Assn. of Broadcasters and the American Newspaper Publishers Assn. joined an effort to loosen or eliminate the cross-ownership restriction.

On Nov. 6, a media-funded research group called Freedom of Expression asked the commission to abolish the rule.

The FCC asked for public comment on the petition and comments were due Wednesday.

The congressional directive, however, ends that effort.

Media companies that have permanent waivers to own TV stations and newspapers in the same market, including the Los Angeles Times and the Chicago Tribune, will not be affected by the legislation.